The 5 Dumbest Things on Wall Street This Week: Sept. 27

5. Blackberry's Flying Circus

Wow! Fairfax Financial ( FRFHF) is buying BlackBerry ( BBRY) lock, stock and Bombardier. Now there's one that flew right by us.

The sputtering smartphone-maker, which received a lifeline in the form of a $9 takeout bid from Fairfax Monday, added a larger plane to its corporate-jet fleet in July even as it was slashing jobs to cut expenses, according to the WSJ. The company purchased in July a 2006 Bombardier Global Express, a plane with a resale value around $25 million, not even a year after it unloaded one of its three corporate jets to cut costs. BlackBerry brass fessed up to its insanely extravagant purchase Sunday, saying it now plans to jettison all its jets to deal with its well-known financial difficulties.

Shares of the once-iconic Canadian company closed down 17% last Friday to $8.25 after reporting a second quarter loss of almost $1 billion and said it was cutting 40% of its workforce. Blackberry stock bounced back above $9 on Monday with news of the takeout offer and then drifted lower as the market wondered if Fairfax would be able to find financing for the $4.7 billion deal. Fairfax already owns about 10% of the company and has been adding to its position since 2010 when the stock was trading well above $50 a share.

Setting aside the larger question -- and it is a massive one -- as to why Fairfax CEO Prem Watsa, the so-called "Canadian Warren Buffett," keeps throwing good money after bad at this technologically irrelevant company, we still want to know why BlackBerry would be jet-shopping this summer instead of hoarding cash to save itself.

"In light of the company's current business condition, the company has decided to sell that aircraft along with the two legacy aircraft and will no longer own any planes," said company spokesman Adam Emery said in a statement.

Thanks Adam, but that still doesn't explain what Blackberry CEO Thorsten Heins was smoking when he signed off on the private plane in the first place. If he was betting on a turnaround in Blackberry's handset business, then he clearly made one foolish forecast.

Apple ( AAPL) sold a record 9 million iPhone 5S units last weekend. Blackberry, by comparison, sold a total of 3.7 million phones for the entire second quarter.

Sorry Thorsten, but if you were searching for a way to look down on Tim Cook's team, buying a private jet was not it.

4. Foolish Filmmaker

Here's a Dumbest tale that has anything but a Hollywood ending.

The Securities and Exchange Commission charged Lawrence Robbins, a moronic Manhattan-based independent filmmaker, with insider trading on a pair of biotech mergers Monday. The SEC alleges Robbins pocketed over $1.5 million in illicit profits after buying options on takeover targets Millennium Pharmaceuticals and Sepracor ( SEPR) based on confidential information that he received from his movie business partner John Michael Bennett. The boneheaded Bennett received the tips from his asinine acquaintance Scott Allen who worked at a firm involved with the transactions.

Robbins agreed to settle the SEC's charges by paying more than $1 million. The SEC previously charged Bennett and Allen for their starring roles in the scam.

"Robbins plotted with his business partner to perpetrate an insider trading scheme that enabled him to invest a portion of his illegal profits in their film production company," said Sanjay Wadhwa, Senior Associate Director for Enforcement in the SEC's New York Regional Office. "Their plot, however, did not account for the real world consequences of being caught by the SEC."

Oh man. You just know Sanjay relished that "real world" line. We guarantee he's putting that one in the screenplay he's currently scratching out at home when he's not chasing real life criminals at the office. And you also just know he wants to play himself in the movie.

Come to think of it, Sanjay's future film probably will perform better at the box office than the flops Robbins and Bennett were churning out with the winnings from their illegal option trading. For example, the pair poured money into a 2012 flop called "Playback" which garnered a mere $264 bucks at the box office.

Get with it guys! Don't you know you're supposed to stash insider trading profits in Cayman Island accounts and not Christian Slater vehicles?

Of course, they should also have known that the Feds always investigate highly irregular out-of-the-money call trades in the wake of a big biotech deal. But apparently these foolish filmmakers were not familiar with that well-known Wall Street plot device.

We certainly don't expect the writers hard at work on the big-screen adaptation of "The Stevie Cohen Story" to make that rookie mistake.

3. Celldex Shenanigans

Remember the good old days when sell-side analysts would push profitless stocks to drum up investment banking business? You know, those wild and crazy times during the Internet bubble when Wall Street giants like Jack Grubman and Henry Blodget lined their own pockets by setting astronomical price targets on crappy or supremely speculative stocks?

Well, if you are too young to recollect the quid-pro-quo research of the go-go 1990's, or have shuttered those memories forever, have no fear. A classic case was on display in the biotech sector this week and boy did it strike our nostalgia bone.

On Monday, Leerink Swann analyst Howard Liang raised his price target on Celldex Therapeutics ( CLDX) from $29 to $45 per share, which implies the company's market value will ultimately be $3.6 billion if it hits Liang's target. Shares of the cancer drug company popped 10% Monday on Liang's cheerleading to $33, giving it an impressive market-cap of $2.7 billion.

Seriously, that's quite a feat for a company with essentially no sales and that Wall Street expects to lose 97 cents a share this year and $1.02 cents in 2014.

So why does Liang believe Celldex is worth $1 billion more today than it was last Friday?

It's because of CDX-1127, an experimental cancer immunotherapy which hasn't yet reported any clinical data in patients. The first human data from a phase I study are expected in early November, but as TheStreet's biotech ax Adam Feuerstein points out, Liang is setting the bar very low for Celldex to clear.

"As a combination partner for immune checkpoint inhibitors such as anti-PD-1 agents, we believe the efficacy bar for CDX-1127 is not high based on our analysis of early clinical data on other IO agents, and we believe any demonstration of single-agent activity coupled with a clean safety profile could position CDX-1127 as one of the leading candidates for PD-1 combination," wrote Liang.

The eagle-eyed Feuerstein also highlights the fact that Celldex raised $90 million this past February in an offering co-managed by Liang's employer Leerink. And one can only imagine that Leerink will be right there should Celldex need to raise additional funds again.

And Liang too, of course, with a pom pom in each hand.

2. Benmosche's Big Mouth

Hey Paula Deen, guess who's coming to dinner?

AIG ( AIG) CEO Bob Benmosche joined the outcast TV chef in the hot seat Tuesday after making aracially insensitive remarks equating the uproar over banker bonuses during the 2008 financial crisis to African-American lynchings decades ago in the Deep South. Benmosche later apologized for his "poor choice of words" but not before being pilloried by a number of prominent government officials.

In an interview with the WSJ, Benmosche was quoted as saying that public outrage over the insurance giant's hefty paychecks to its employees after the government bailed out the company due to its reckless options bets "was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that - sort of like what we did in the Deep South (decades ago). And I think it was just as bad and just as wrong."

Oy Gevalt Bob! You don't have to be a genius to know that frank talk is fine, but Leo Frank-talk is not.

Honestly, we thought Bob would have learned to weigh his statements more carefully after he was ridiculed last year for his painfully self-involved statements in New York Magazine. Remember that doozy of an interview? The one when Benmosche whined that the Fed and the Treasury never said 'Thank you' for paying back the billions they loaned to AIG to keep the global economy from cratering?

That silly remark made him look like a narcissist CEO, something we are quite used to, so the hullabaloo quickly blew over.

This lip slip, however, may linger a little longer because Benmosche stupidly brought race into it.

"I find it unbelievably appalling that Mr. Benmosche equates the violent repression of the African American people with congressional efforts to prevent the waste of taxpayer dollars," said Rep. Elijah E. Cummings (MD, Dem), who also called for Benmosche to resign his post.

We here at the Dumbest lab don't agree with Cummings that Benmosche should get going over his idiotic analogy. The punishment simply doesn't fit the crime. Lord knows we would have to shut down the government a long time ago if we expelled Congressmen each time they made a stupid, insulting or insensitive comment.

Then again, it may come to that anyway because these morons can't sit down and talk to each other.

1. Chrysler's Conundrum

Chrysler Group filed for a public offering with the SEC Monday as part of an effort to prevent itself from going public.

You figure it out. We sure as heck haven't been able to.

Chrysler, which was bailed out by Uncle Sam in 2009, emerged from Chapter 11 protection with financial support from Fiat ( FIATY) as part of a complex deal that has resulted in the Italian carmaker steadily increasing its ownership to 58.5%. The remaining shares are owned by a union-managed trust established in 2007 to pay retiree health care costs.

Fiat has been seeking to bring Chrysler in-house as a wholly owned unit, but the company to date has been unable to reach an agreement with the United Automobile Workers' Voluntary Employee Beneficiary Association (VEBA) on a valuation of the remaining VEBA-owned shares. Combining the two companies would allow Fiat to access Chrysler's cash reserves to fund operations as well as make it easier for the Italian company to cut back office costs by further integrating their operations.

And thanks to Sergio Marchionne, who serves as CEO of both Fiat and Chrysler, those cash reserves are rising. Chrysler has enjoyed recent sales success thanks in part to new, more fuel-efficient designs borrowed from Fiat, generating a profit of $507 million in the second quarter of 2013.

Marchionne said earlier this month the trust wants upwards of $5 billion for its stake. Fiat, however, is only willing to pony up about $2 billion. The shares to be sold in a potential IPO, which represent about 16% of the Chrysler's total, are part of VEBA's stake.

Here's the wacky part. In order to prove its number is the correct one, VEBA is pushing for a Chrysler IPO, even though resolving the dispute prior to an offering is the best result for both sides. It's basically brinksmanship.

In Fiat's view, public ownership would totally complicate its plans to blend the two companies because it lets outside investors into the process. And as we all know, outside investors are a pain in the ass. They might, for example, demand Fiat pay through the nose for VEBA's stake to benefit their own holdings, or even put the kibosh on the Fiat merger entirely.

Meanwhile, a Chrysler IPO poses risks for the union as well. Most notably, the fact that would-be investors might avoid buying shares in a company which is unable to get its act together. The fact that Chrysler and Fiat can't hash this thing out at the bargaining table could dampen demand for the stock, making it impossible for VEBA to get the higher price it wants for its remaining shares.

"If Fiat becomes unwilling to work with us beyond the scope of its existing contractual obligations, there may be a material adverse effect on our business prospects, financial condition and results of operations," the company said in the filing.

Forgive us if this is tricky. It's breaking our brains too.

We've never seen an auto IPO driven purely by spite either.

-- Written by Gregg Greenberg in New York

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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